Economic Survey Projects 6.3%-6.8% Growth for Indian Economy in FY26

Strong domestic fundamentals, declining unemployment, and stable inflation to drive India’s growth, with further reforms needed to sustain momentum.

January 31, 2025: New Delhi: The Indian economy is expected to grow between 6.3% and 6.8% in the financial year 2025-26 (FY26), according to the Economic Survey 2024-25 tabled by Finance Minister Nirmala Sitharaman in Parliament today.

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The survey, released ahead of the Union Budget 2025-26, attributes this optimistic outlook to robust domestic economic fundamentals, declining unemployment rates, and stable inflation. However, it emphasizes the necessity for grassroots-level reforms and deregulation to sustain long-term growth.

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Key Highlights from the Economic Survey 2024-25:

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• Robust Fundamentals: The Indian economy showcases a strong external account, calibrated fiscal consolidation, and steady private consumption.
• Food Inflation Outlook: Food inflation is expected to soften in Q4 FY25, aided by the seasonal easing of vegetable prices and Kharif harvest arrivals.
• Global Headwinds: Geopolitical uncertainties and trade challenges remain potential risks to economic momentum.
• Strategic Management Needed: The survey stresses the importance of prudent policy-making and reinforcing domestic fundamentals to navigate global headwinds.
• Reforms for Competitiveness: India must enhance global competitiveness through grassroots structural reforms and deregulation.
• Inflation Risks: Risks from higher commodity prices appear limited in FY26, though geopolitical tensions still pose concerns.
• AI Governance: The survey warns about the lack of governance frameworks for AI, cautioning against potential misuse or abuse of the technology.
• Impact of Insolvency Law: The deterrent effect of India’s insolvency law has led to thousands of early-stage resolutions of distressed debts.

Finance Minister Nirmala Sitharaman is set to present the Union Budget 2025-26 on February 1, with expectations of targeted measures to complement the growth trajectory outlined in the Economic Survey.

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Indian Economy Growth, Economic Survey 2024-25, FY26 Growth Projections, Nirmala Sitharaman Budget 2025, India Economic Reforms, Inflation Forecast FY26, Indian Competitiveness Reforms